Abdel Hakim Belhaj and his wife were kidnapped after cooperation between the CIA and MI6.
Photograph: François Mori/AP

The British government is understood to be about to settle a long-running compensation claim brought by a husband and wife who were the victims of a so-called rendition operation mounted with the help of MI6.

Abdel Hakim Belhaj and his wife, Fatima Boudchar, have battled for compensation and an apology for more than six years, after papers that came to light during the Libyan revolution revealed the role that British intelligence officers played in their 2004 kidnap in Thailand.

The couple were hooded and shackled and flown to one of Muammar Gaddafi’s prisons, where Belhaj was tortured and sentenced to death.

The attorney general, Jeremy Wright, is expected to make a statement to MPs on Thursday, and Belhaj, now a military commander in Libya, will make a statement in Istanbul shortly afterwards.

It is unclear what the agreed terms are, although Belhaj has in the past said he would settle for just £3 – £1 from each of the defendants, as long as he and his wife also received an apology from the British government.

The couple had been suing the former foreign secretary Jack Straw, and Sir Mark Allen, the former head of counter-terrorism at MI6, as well as the agency itself and the Foreign Office.

The couple’s lawyers have also brought judicial review proceedings against the Crown Prosecution Service after prosecutors concluded that there was insufficient evidence to bring criminal charges against Allen following a four-year Scotland Yard investigation.

Among the evidence obtained by Yard detectives was a faxed letter from Allen to Gaddafi’s intelligence chief, Moussa Koussa in which he made clear that MI6 had tipped off the Libyans about the couple’s whereabouts prior to their kidnap.

In the letter, Allen congratulated Koussa on the “safe arrival” of Belhaj. “This was the least we could do for you and for Libya to demonstrate the remarkable relationship we have built over recent years.” He added that “amusingly”, the CIA – which had provided the aircraft for the rendition operation – had asked that MI6 channel all requests for information from Belhaj through them.

“I have no intention of doing any such thing. The intelligence … was British. I know I did not pay for the air cargo. But I feel I have the right to deal with you direct on this.”

In an interview with the Guardian, Boudchar described how she had been taped head-to-toe to a stretcher for the 17-hour flight to Tripoli. “My left eye was closed when the tape was applied. But my right eye was open, and it stayed open throughout the journey. It was agony.” Nearby, she could hear the grunts of pain of her husband, who had been shackled into a stressful position.

Boudchar was four-and-a-half months pregnant at the time that she was kidnapped. She was set free shortly before giving birth.

Two weeks after the couple were renditioned to Libya, Tony Blair paid his first visit to the country, embracing Gaddafi and declaring that Libya had recognised “a common cause, with us, in the fight against al-Qaida extremism and terrorism”. Simultaneously, in London, the Anglo-Dutch oil company Shell announced it had signed a lucrative deal for gas exploration rights off the Libyan coast.

Three days after that, a second opponent of Gaddafi, Sami al-Saadi, was bundled onboard a plane in Hong Kong and taken to Tripoli in a joint British-Libyan rendition operation. Saadi’s wife and four children were also kidnapped and taken to Libya. The youngest was a girl aged six. The family was incarcerated at Tajoura for more than two months before being released. Saadi and Belhaj were held for more than six years, however, and say they were subjected to torture throughout this time.

Other documents discovered during the Libyan revolution make clear that information extracted from Belhaj was then used to justify the detention in Britain of members of his Islamist opposition group, the Libyan Islamic Fighting Group, some of whom had settled in the UK as refugees many years earlier.

Before the two families had been kidnapped, the UK and US governments had been pressing Gaddafi to abandon his nuclear and chemical weapons programmes, which he pledged to do in December 2003.

A spokesperson for the attorney general’s office confirmed that: “[Wright] will make a statement tomorrow in parliament in the matter of Abdul Hakim Belhaj and Fatima Boudchar.”

It is not yet clear whether the settlement will also terminate the judicial review challenge of the CPS decision not to prosecute Allen. Both the former MI6 officer and Straw deny any wrongdoing.